The European Securities and Markets Authority (ESMA) has published today its final technical advice (TA) and launches a consultation on its draft regulatory technical and implementing standards (RTS/ ITS) regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
Both ESMA’s TA and draft RTS translate the MiFID II/MiFIR requirements into practically applicable rules for market participants and national supervisors.
Steven Maijoor, ESMA Chair, said:
“Today’s implementing rules on both secondary markets and investor protection issues reflect ESMA’s desire to achieve the best outcome for market users and investors, taking into account the extensive submissions received from our stakeholders. The advice now goes to the European Commission to use in preparation of its delegated legislation, while our technical standards are open for a second round of consultation.
“Once fully implemented, MiFID II will have a significant impact on the EU’s securities markets, its users and infrastructure providers. It will bring greater transparency and improve the overall functioning of markets thus strengthening investors’ trust in the financial sector.”
MiFID II to include most financial instruments, trading venues and techniques
MiFID II/MiFIR introduces changes to the functioning of secondary markets, including transparency requirements for a broad range of asset classes; the obligation to trade derivatives on trading venues; requirements for algorithmic and high-frequency-trading and new supervisory tools for commodity derivatives.
The key proposals stemming from ESMA’s TA/draft RTS cover the following issues:
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A trading obligation for shares and a double volume cap mechanism for shares and equity-like instruments, introducing a major change to the framework for trading these instruments in the Union
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An obligation to trade derivatives on MiFID venues (regulated markets, multilateral (MTFs) or organised trading facilities (OTFs)) only, in line with G20 requirements;increased trade transparency, for non-equity instruments, in particular bonds, derivatives, structured finance products and emission allowances
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Newly introduced position limits and reporting requirements for commodity derivatives
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Rules governing high frequency trading, imposing a strict set of organisational requirements on investment firms and trading venues
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Provisions regulating access to central counterparties (CCPs), trading venues and benchmarks, designed to increase competition in the Union
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Requirements for a consolidated tape of trading data, including rules for tape providers, reporting, publication and sales of data
Full press release
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